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World Oil Supply

OPEC Monthly Oil Market Report – November 2017

47

US tight oil production

grew by 73 tb/d m-o-m to

average 4.71 mb/d in August, surpassing the

previous highest level of 4.70 mb/d in March 2015,

according to estimated EIA tight crude data. Tight

crude output from horizontal wells increased in the

Permian by 0.05 mb/d to average 1.92 mb/d in

August and for September preliminary data

indicates an even higher level at 1.96 mb/d, while

tight crude output in the Eagle Ford dropped by

0.02 mb/d to average 1.09 mb/d, following the

heavy flooding caused by Hurricane Harvey.

Monthly growth of 0.03 mb/d and 0.01 mb/d was

reported in the Bakken and Niobrara shale to

average 1.06 mb/d and 0.33 mb/d, respectively.

Other regions either stagnated or experienced

minor declines. Preliminary estimates of tight crude

output in September indicate growth of 0.06 mb/d to

average 4.77 mb/d.

Oil production in the

US Gulf of Mexico

decreased

by 66 tb/d m-o-m, down to 1.69 mb/d in August,

mainly due to the disruption in production in late

August during Hurricane Harvey, and indicating

average growth of more than 100 tb/d y-t-d.

Graph 5 - 9: US monthly liquids production

breakdown

Regarding tight crude estimation in 2017 and the next year, according to the latest assessment on new well

productivity, production legacy and the active rigs in the shale and tight key regions, growth of 0.43 mb/d

y-o-y to average 4.67 mb/d is expected for this year and for 2018 the forecast growth will be higher y-o-y at

0.62 mb/d, to average 5.29 mb/d, mainly due to the higher GDP growth in the US and expected better

margins for shale producers following the recent positive trend in market momentum. The results of region-

by-region analysis on an annual base, are presented in

Table 5 - 5.

Table 5 - 5: US shale play’s production growth forecast in 2017 and 2018

US oil rig count

According to the

Baker Hughes

report for the week to 3 November 2017, the total US rig count has dropped

by 11 units to 898 rigs (81.2% for oil and 18.8% for gas), w-o-w. The oil rig count is down by 8 units to

729 rigs, while the gas rig count decreased only by 1 unit to reach 189 rigs. 18 rigs were active offshore,

mostly in the GoM.

On a monthly basis

, the total US rig count dropped by 18 units to average 921 rigs, as on-land rigs

decreased by 19 units m-o-m to average 901 rigs. Regarding monthly oil rigs, the count fell by 9 units to

average 741 rigs, after dropping by 13 units in September. The US oil rig count in October was higher by

305 units, y-o-y, an increase of 70%. Gas rigs grew by 75 units to reach 180 rigs y-o-y, an increase of about

71%. In October, the Permian Basin is now home to nearly 51% of the active oil rigs with 381 rigs in the US,

its highest contribution since basin-level data became available in early 2011. In the Williston Basin, in which

0

4

8

12

16

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017*

2018*

mb/d

Conventional crude oil

Gulf of Mexico crude

Conventional NGLs

Biofuels + Other liquids

Tight crude

Unconventional NGLs

Note: * 2017 = Estimate and 2018 = Forecast.

Sources: Energy Information Administration, Rystad Energy

and OPEC Secretariat.

Conventional

sources

Unconventional

sources

Shale play

tb/d

Production

Y-o-y change

Production

Y-o-y change

Permian tight

1.85

0.39

2.30

0.45

Bakken shale

1.04

0.02

1.06

0.02

Eagle Ford shale

1.15

-0.02

1.19

0.03

Niobrara shale

0.31

0.02

0.39

0.08

Other tight plays

0.32

0.02

0.35

0.03

Total

4.67

0.43

5.29

0.62

Note: * 2017 = Estimate and 2018 = Forecast.

Source: OPEC Secretariat.

2017*

2018*